What Is A Living Trust?
If you have ever heard about last will, then you need to hear a living trust too. A living trust form is a document that helps someone to provide clear direction about the estate distribution after death. This gives the individual greater trust and control to assets about how the assets will be handled after he/she dies. What makes this form beneficial is its ability to save the expense and also delays the probate up to three years Besides, a trust gives you more flexibility and creativity in controlling the assets after you die. This is power.
One of the examples of the control benefit from a trust form is a parent is leaving money to the children through a third party (for example financial institution). The parents can decide on what age their children can withdraw money. Another example is protecting the assets from creditors such as lawsuits, bankruptcies or the “in-laws”.
When Do You Need To Make Your Living Trust Form?
The best time to make your own living trust form is when you are healthy and still able to make decision financially, mentally and physically. Besides, the agreement will:
- Make sure that the assets and the estates will be distributed correctly when you are gone.
- Help you distribute the assets efficiently and act as the guidepost in providing things for the dependents.
- Solve conflicts that might arise in the future.
What Are The Types of Living Trusts?
There are many types of living trusts which all can be drafted with the help of an attorney. The following type of trusts are as follow:
- Revocable trust – This type of living trust allows the individual to control the assets while he/she is alive. It is flexible and be shifted around and can be revoked any time while the person is still alive. For you who are looking for privacy and control over the asset, it is the best choice.
- Irrevocable trust – This trust cannot be changed and revoked. Besides, all of the assets that are included in this document cannot be accessed by the creditor.
- Asset protection trust – This type of document will protect the trust holder from creditors to claim the assets. This can be set in a specific amount of time.
- Charitable trust – This trust is drafted by for particular charity. It also gives significant tax benefits.
How To Set Up A Living Trust?
It is highly suggested to ask help from an attorney to establish your document. You can follow the following guidelines.
- Pick the type of trust that suits for you. Look at some factors such as marital status, children, business and the size of the estate.
- Decide the assets that will go into the trust such as a home, an investment portfolio, etc.
- Decide who will be the holder of the trust. Typically it will benefit the friend, family, business partner, charity and spouse. You need to think carefully who will be the holder.
- Download our living trust form and customize what you need to write, and then ask the attorney help to fix your draft.
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